Last updated: April 12, 2024
Morningstar reports indicate DraftKings and ESPN Bet are increasing market share in significant states, while BetMGM and Caesars face challenges. Analysts emphasize DraftKings’ dominance and ESPN Bet’s promising performance, while cautiously assessing Penn Entertainment’s potential amid competition and financial liabilities.
In the top states offering mobile sports betting, including Michigan and Pennsylvania, DraftKings and Espn Bet from Penn Entertainment are very quickly gaining market shares compared to their counterparts BetMGM and Caesars Sportsbook, suggesting from the findings of a recent report by Market analyst Daniel Wasiolek. ESPN Bet registered a notable revenue growth of 7% and 4% in Michigan and Pennsylvania respectively, while the last year statistic of the group’s Barstool Sportsbook scored 13% less revenue in the same area. According to the company’s recent statements, its sports betting product, ESPN Bet, commands a high single-digit share in both states, perhaps taking it from its rivals.
However, the total market share of Caesars decreased by 3-5%, while that of Caesars remained stable and saw a 3% decline. Under pressure from the big competition, little ones would see their shares drop off by 3 to 3 percentage points, what Wasiolek highlights.
In mobile sports book operators, Michigan and Pennsylvania are on the list of top states in sports betting handle and revenue, except New York, they were born after the Supreme Court abolished the Professional and Amateur Sports Protection Act (PASPA). AMobilitysports betting has been legal in Michigan for over three years and still emerges as the 10th biggest revenue-generating and front-end handling sports in the industry.
Concerning the online sports betting combat between DraftKings and FanDuel which belongs to Flutter Entertainment, they are showing a quiet head-to-head battle for the number one position in states where they are licensed to operate, with only in a few states DraftKings being slightly above.
Analyzing the performance of DraftKings, Wasiolek gave great approval regarding the company’s recent milestones, mentioning notably enhanced market participation mainly in such states as Pennsylvania and Michigan. This company is building up its market presence very quickly, and this development has raised investor confidence in their revenue prospects which translates into an increase in the valuation of the company to $47 per share.
Conversely, Wasiolek expressed reservations regarding the digital unit of Caesars Entertainment, foreseeing hurdles in meeting earnings targets due to subdued sales in Michigan and Pennsylvania. Consequently, he has adjusted Caesars’ fair value estimate downward to $73 per share, reflecting a projected decline in digital margins to an average low 20% over the next decade from the previously estimated mid-20s.
Penn’s ESPN Bet has demonstrated strong performance since its launch in November, potentially easing investor concerns about the app’s competitiveness against established rivals like DraftKings and FanDuel. Analyst Wasiolek acknowledges the value in Penn shares, yet remains wary of the company’s high debt levels. He suggests that while Penn’s $24 fair value estimate presents an appealing opportunity for investors, the company’s financial leverage may lead to volatility due to ongoing high financing expenses.
Marilyn Chavez is an associate researcher at the Missouri University of Science and Technology, where she studied the mathematical probabilities and aspects of casino games like slot machines. She’s written several case studies which have been published by multiple problem-gaming institutions to help spread awareness about the dangers of online gambling and gambling addiction. She also presented a 2019 Ted talk on the topic of gambling among minors.
